Citizens scorn the government debt
The Fiscal Discipline Council scorned the government of Krišjānis Kariņš by commissioning a poll of the population with the predictable result that "the majority of the population is not in favor of increasing public debt at the expense of future generations."
The announcement on the survey and its results, issued by the Fiscal Discipline Council, starts with the words of its chair Inna Šteinbuka (pictured) that "contrary to the calls for increasing the public debt that are heard from time to time in society, the survey confirms another trend, namely that the Latvian population is closer to the idea that 'debt is not a brother.'"
The numerical value of the sentiment of the population was measured by the market and social research firm SKDS. "The majority of respondents (73%) generally do not find acceptable the principle that the state borrows money to solve today's problems and the next generation pays for it (rather not acceptable - 36%, not at all acceptable - 37%). This principle is acceptable to 1/5 or 19% of respondents (rather acceptable - 17%, completely acceptable - 2%). This principle is more often acceptable to men, younger respondents and respondents with a higher level of education and income."
If these 73% really represent the opinion of the whole society, which has no obstacles to express their opinions in the Saeima elections, then it would be enough to write into the Constitution a ban on state borrowing and to establish a government that respects the Constitution on this point. Nothing of the sort happened either immediately after the establishment of the Republic of Latvia or in the decades after the restoration of the country's independence. And there is no indication that this is possible now or later. Why do politicians not act in accordance with the demands of the absolute (constitutional, etc.) majority of the population, and why does this majority not impose its will on politicians in the elections to the Saeima, which are actually being held fairly? In other words, how many votes would an electoral formation gather this autumn that entered the electoral fray with the central promise that the government would never borrow money again and would at least gradually get rid of old debts?
The lack of the deniers of borrowing suggests that there is little chance of winning power in this way. Those in power, on the other hand, hope to hold on to power by chanting the exact opposite of what they are doing. The slogan "debt is not a brother" that was just quoted was used by Finance Minister Jānis Reirs (pictured) even before Šteinbuka. Not in ye olde times, but during these recent Covid times, on October 6 last year, Reirs posted on the website of the Ministry of Finance a think piece with that very title. The text is interwoven with statements that are also made or supported by Šteinbuka: "The belief that GDP growth will outstrip debt growth, that interest payments will remain low, that investments made at the expense of debt will be so productive that they will more than compensate for the additional debt, cannot be the basis for responsible management of public finances."
At the same time, Treasury figures show that under Reirs' current ministering, the public debt has increased more than one and a half times from €10.8 billion at the start of 2019 to €15.2 billion at the end of last year. The 2022 state budget warns the country is on course for €17 billion in debt by the end of the term of office of Reirs and the entire Kariņš government.
The right to say bad things about the public debt has been granted by the public to those who can be relied on to say nothing but empty words. That is to say, those who will not be prevented from increasing the debt once, twice and always, as soon as there are louder or otherwise influential demanders for money that would be impossible to satisfy in the case of a balanced state budget.
Everyone, from the entrepreneur to the homeless, stands a chance of benefiting from the money that the state has stolen. Accordingly, those who are now in power have a good chance of staying in power, having demonstrated their ability to borrow and share what they have borrowed.
Talk about the harm of public debt, and debt in general, is as convenient to society as increasing the debt burden. It is tough talk that reassures people that money will certainly not be given to everyone. Every group in society is convinced that state support should go to that group (civil servants, doctors or artists, large families, single-parent households and the aforementioned homeless people...), but not to any other group that asks for money only because of its own laziness, stupidity or cunning.
Now people no longer have to wonder whether money will lose or not lose value if the state gives money to all who ask for it. The loss of the value of the euro is evidenced by every visit to a shop, by every bill received. In other words, the repayment (covering, cancelling, writing off) of debts in the form of inflation has begun much sooner than the children of today, about whose future welfare the majority of Latvians are verbally very concerned, will be working, earning and paying taxes.